Lesson Notes By Weeks and Term - Senior Secondary 1

Term: 1^st Term

Week: 3

Class: Senior Secondary School 1

Age: 15 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Financial accounting

Topic:-       Books of account: layout and format

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

1. Define books of account
2. State and explain the types of books of account

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

NOTE

BOOKS OF ACCOUNT

Books of accounts are the books that are used in recording financial transactions in accounting.

The books of accounts in use are:

1. The Ledger – The Principal book
2. The Journal – The Subsidiary book

The Ledger

The ledger is the principal book of account which contains in a classified form, the permanent records of all the financial transactions of a business.

The recording into the Ledger are done in classified form using ledger accounts.

The Ledger account is divided into two sides i.e. The Debit and The Credit.

Therefore, in accounting entries are described as being ‘debited’ or ‘credited’ to particular accounts. Transactions are recorded in the Ledger based on the double entry principle.

Types of Ledger

There are 3 types of Ledgers –

• Sales Ledger
• Purchase Ledger
• General Ledger

1. Sales Ledger– Sales Ledger is a ledger in which the company maintains the transaction of selling the products, services or cost of goods sold to customers. This ledger gives the idea of sales revenue and income statement.
2. Purchase Ledger– Purchase Ledger is a ledger in which the company organizes the transaction of purchasing the services, products, or goods from other businesses. It gives the visibility of how much amount the company paid to other businesses.
3. General Ledger– General Ledger is divided into two types – Nominal Ledger and Private Ledger. Nominal ledger gives information on expenses, income, depreciation, insurance, etc. And Private ledger gives private information like salaries, wages, capitals, etc. Private ledger is not accessible to everyone.

Some examples of General ledger templates

The Journal

The Journal is the subsidiary book of account into which credit transactions are first recorded before they are posted in totals to the Ledger.

The recording of financial transactions into the Journal does not follow the double entry principle

Cash Transactions are recorded directly into the Ledger while Credit Transactions are first recorded into the Journal (i.e. the subsidiary books) before being posted in totals to the ledger.

Sub Division of Journal

We can divide the journal into the following two types:

1. General Journal
2. Special Journal

General Journal

In this book, we record transactions in the chronological order. We record those transactions in this book which do not occur frequently and also which we cannot record in the special journals.

The recording of transactions is known as journalizing. Also, the record of the transaction is known as a journal entry.

Usually, we pass the opening entries, closing entries, rectification entries, adjustment entries and entries relating to incomes and expenses which are due.

Special Journal

It is popularly known as the subsidiary books. In these books also, we record transactions in the chronological order.

However, we record transactions in these books which occur frequently and on a regular basis. All the transactions of similar type are recorded in a separate book.

There are eight subsidiary books that an organization maintains, viz., Cash Book, Purchases Book, Sales Book, Purchase Return or Return Outwards Book, Sales Return or Return Inwards Book, Bills Receivable Book, Bills Payable Book and Journal proper. A Cash Book is a subsidiary book as well as a ledger.

EVALUATION:   1. Define books of account

2. State and explain the types of books of account

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively